TEL AVIV — Between 80,000 and 120,000 protesters demonstrated, according to police and media estimates demanding "social justice."
More than 50,000 marched in downtown Tel Aviv, police spokesman Micky Rosenfeld told AFP.
"I came because I cannot make ends meet and taxes end up in the pockets of the rich," one of the protesters, who runs a nursery school, said.
In Jerusalem, 15,000 protesters gathered outside the residence of Prime Minister Benjamin Netanyahu holding up banners that read: "A whole generation wants a future."
In the northern city of Haifa more than 10,000 protesters took to the streets, police said.
Demonstrations over the high cost of living spread in recent weeks throughout Israel, with demonstrators setting up protest camps to demand affordable housing and denounce social inequalities.
The protesters, mainly secular youths, say they are pushing for "social justice not charity" and have denounced the deterioration in public services, namely health care and in education.
On Thursday protesters occupied the roof of the Tel Aviv stock exchange, a day after the powerful Histadrut labour union threw its support behind the demonstrators.
Histadrut said it was issuing Netanyahu with an ultimatum.
"If by Saturday evening, the prime minister has failed to meet with our secretary general Ofer Eini to discuss solutions to lift this social crisis, Histadrut will use all means at our disposal to support the demands of the protesters," a spokeswoman for the union told AFP earlier this week.
She declined to say whether Histadrut would call on its members to join a general strike announced by Israel's Union of Local Authorities on Wednesday.
The August 1 one-day strike will see local authority offices shut down and rubbish collections halted.
Since 2004, Israel's economic growth rate has averaged 4.5 percent, while unemployment has fallen to around six percent from close to 11 percent over the same period.
But gaps between Israel's rich and poor are among the widest in the Western world. In 2011, Israel ranked fifth for unequal income distribution among the 34 member states of the Organisation for Economic Cooperation and Development.
Netanyahu was forced to cancel a trip to Poland this week to address demonstrators and offered them reforms which they rejected as insufficient.